Congress
and the President have been good to military personnel this year. On December
28th, 2001, President Bush signed into law the FY2002 Defense Appropriations
Bill. In addition to the largest increase in basic pay in 20 years, and
the largest increase to housing allowances in 10 years, there have been
several increases and improvements in military pay and compensation.

Base
Pay

Effective January 1,
2002, all active duty, guard, and reserve members will see the largest
increase in base pay in the last 20 years. The raise, which averages 6.8
percent, is "targeted," ranging from 5 percent to a maximum
of 15 percent. The raise is significantly higher than the inflation rate
(2.9 percent for last year), and ahead of the average wage increases for
the private sector (4.1 percent). Most of the increase this year is targeted
toward mid-grade and senior-grade noncommissioned officers and petty officers,
as well as mid-grade commissioned officers. Including the special midyear
increase given in July of 2000 and 2001, this is the fourth consecutive
time that pay increases have been targeted to specific pay grades. Another
change is for Reserve officers with prior enlisted experience. Previously,
unlike active duty officers with prior enlisted experience, Reserve officers
did not have additional "OE" categories in the pay charts. Under
the new law, Reserve officers with more than four years enlisted time
are treated like active duty officers. (See
new base pay charts)

Housing
Allowance

(See
new BAH charts) Also effective the first day of January, basic allowance
for housing (BAH) increases an average of 10 percent across the board.
This is the second consecutive year that housing allowances have risen
significantly, as part of a five-year plan to reduce average out-of-pocket
housing expenses to zero by the year 2005. In 2000, average out-of-pocket
costs were 20 percent, reduced to 15 percent with the raise for 2001.
The 2002 raise brings average out-of-pocket housing expenses to 11.3 percent.
Housing allowance rates are based upon rank, location, and whether or
not a member has dependents. Below are some selected examples of costs
used to determine rates for members with dependents:

Rank

Reimbursement
Criteria

Average
monthly BAH for 2002

E-5

Average
cost of a two-bedroom townhouse or duplex

$822

E-6

Average
cost of a three-bedroom townhouse or duplex

$933

E-7

Average
cost for a three-bedroom townhouse plus 36 percent of the cost difference
between a townhouse and three-bedroom home

$990

E-8

Average
cost for a three-bedroom townhouse plus 75 percent of the cost difference
between a townhouse and a three-bedroom home

$1063

E-9

Average
cost of a three-bedroom home, plus 16 percent of the cost difference
between a three-bedroom and four-bedroom home

$1178

W-3

Average
cost of a three-bedroom single-family home

$1042

O-5

Average
cost of a four-bedroom single-family home

$1549

Food
Allowance

(See
new BAS Chart). There are several significant changes to how Basic
Allowance for Sustenance (BAS) is managed for 2002:

(1) First
and foremost, under previous law, BAS was paid only when individuals
were officially allowed (for various reasons) to eat their meals outside
of the military dining facilities (chow halls). Those required to eat
meals in the dining facilities (usually, single enlisted, living on-base)
received a "partial allowance" of about $25.80 per month.
Under new procedures, all enlisted and officers receive full-rate BAS,
after initial entry training (boot camp and follow-on schooling). However,
for those required to consume meals in the dining facilities, most of
the BAS will be automatically deducted from their paychecks, resulting
in those members still only receiving about $26.00 each month. There
are plans (for the future) to only deduct the cost of meals actually
consumed in the dining facilities, but that is likely several years
in the future (for the present time, DOD depends on the fact that members
required to consume meals in the dining facilities only eat an average
of 70 percent of their meals there, and purchase 30 percent of the meals
elsewhere. The services rely upon the difference to help balance their
food budgets).

(2) Enlisted
members with less than 4 months of service used to be paid BAS at a
lower rate. The new law eliminates this difference.

(3) Since
1998, BAS annual increases have been limited, by law, to one percent.
This year's law eliminates that provision and ties BAS annual increases
to the inflation rate as measured by the Agriculture Department's Food
Cost Index (which, for 2002 is 3.71 percent).

(4) Under
the previous system, there was a little-used category known as "Emergency
Conditions Where No Government Dining Facilities Exist." This category
has been eliminated

(5) Also
eliminated by the new law is the "Rations in Kind Not Available."
This rate is payable when a member's duty or location prevents access
to government dining facilities. In 2001, it paid about $30.00 per month
more than the normal rate. However, DOD has elected to temporarily continue
this category, but will not allow its rate to increase. When the rate
of "normal" BAS exceeds the rate currently allowed under the
"Rations in Kind Not Available" category (probably about two
years from now), it will be permanently eliminated.

(6) BAS
used to be calculated on a daily basis. That means that a person who
received BAS got just a little bit more during months that had 31 days
in them, and a little bit less during the month of February (which has
less than 30 days). Under the new procedures, BAS is a monthly set rate.

Combat
(Danger) Pay

The President
signed the Executive Order for Danger Pay for the Afghanistan region in
November. The order did not contain any provisions for back-pay, so members
who were deployed to the region during September and October did not receive
danger pay of $150 per month. The new law makes danger pay for the Afghanistan
region retroactive to 19 September, which is the date that the earliest
U.S. Forces deployed to the region.

Enlistment/Reenlistment
Bonuses

(See
Bonus Charts) As in previous years, Congress has continued the authority
for the services to pay enlistment and reenlistment bonuses for both active
duty and reserve forces. Congress traditionally only grants this authority
for one year at a time. The previous authority ran out on December 31,
2001. The new provision extends the authority to December 31, 2002.

Another change
to the law allows the services to pay bonuses to people in critical skills
who volunteer to serve in the non-drilling Ready Reserve. Whether or not
the services will implement this program is unknown.

Officer
Accession Bonuses

This is a
new program aimed at attracting new officers for critical officer-skills.
The law allows the services to offer up to $60,000 to attract commissioned
officers for critical skills. There is no information currently available
as to whether or not the services will elect to use this new option, and,
if so, to what extent they will use it.

First, rates
are programmed to increase in three phases. For individuals who enlist
for a period of at least three years, rates increase from $672 per month
to $800 per month on January 1, 2002, then to $900 per month on October
1, 2002, and to $985 per month on October 1, 2003. For those who enlist
for less than three years of service, rates increase to $650 per month
on January 1, 2002; to $650 per month on October 1, 2002; and $800 per
month on October 1, 2003.

The new law
allows members serving in critical specialties to transfer
some of the Montgomery G.I. Bill benefits to their dependents. Under the
law, the services are allowed to let members with more than six years
of service transfer up to one-half of their benefits to their spouse,
in exchange for an additional active duty service commitment of six years.
Members with more than 10 years of service could transfer up to one-half
of their benefits to their child(ren) by agreeing to serve for an additional
six years. While authorized under the law, there is no indication as to
whether or not, or to what extent, the services will implement this option.

Finally,
beginning October 1, members can combine their monthly G.I. Bill benefits
into a single payment to cover up to 60 percent of the total cost of an
entire education program, leading to a high tech job. For example, under
the old system, a two-month high-tech course in data management could
only be reimbursed using two month's worth of G.I. Bill benefits ($672
per month), even though the course might cost several thousands of dollars.
Under the new plan, 60 percent of the entire cost could be reimbursed.

There are
no rate increases for Guard/Reserve G.I. Bill benefits, however, backdated
to September 11, 2001, Reservists who were using their benefits and had
to drop courses because of being called to active duty, will get additional
benefits to cover those courses. Additionally, the 10-year time-limit
for Reservists to use benefits is extended by the period spent on active
duty, plus four months.

Savings
Bond Plan

The new law
authorizes the services to use U.S. Savings Bonds as reenlistment bonuses.
To be eligible, members would have had to complete their initial term
of service, then, members with three or fewer years of service could receive
Savings Bonds valued at $5,000. Those with three to nine years could receive
$15,000, and those with nine or more years could get up to $30,000. Military
officials have already indicated they probably would not implement this
new option, as they feel it simply duplicates the current enlistment/reenlistment
bonus program.

Officer
Uniform Allowance

Last year,
Congress doubled the official initial uniform allowance from $200 to $400,
but forgot to include provisions for officers who entered the service
after October 1, 2000, but before the law was implemented, to receive
the extra $200. The new law allows for officers who entered active duty
on or after 1 October 2000, but only received the $200 allowance, to receive
the remaining $200.

Special
Pays for Troops Under Stop-Loss

"Stop-Loss"
is a program that allows the services to involuntarily extend the enlistment
of members during times of emergency, war, or increased deployment actions.
Many times, individuals affected by Stop-Loss lose some special and incentive
pays at the end of their current enlistment. Under the new law, services
must continue to pay special and incentive pays that the member was entitled
to. This is retroactive to September 11th, so servicemembers currently
under Stop-Loss, who received a pay-cut can apply for reimbursement.

Aviation/Surface
Warfare Officer Early Bonus Program

This is a
special test program, to be conducted by the Navy. If it works out, it
may be adopted by the other services. Under this program, Aviators and
Surface Warfare Officers can sign up for continued service up to one year
before the end of their current obligation, and begin receiving their
continuation bonuses. This doesn't result in any extra money, but does
allow them to receive the money earlier.

Submarine
Duty Pay

The new law
allows the Navy to increase submarine
pay to $1,000 per month. Whether or not the Navy will take advantage
of this authority is up to the Secretary of the Navy.

Installments
for Redux Bonus

Under current
law, at the 15-year-point of their career, members must decide whether
to accept a cash bonus of $30,000 with reduced retirement benefits, or
receive full retirement benefits, with no cash bonus (See
Understanding Military Retirement). The new law allows those
who accept the bonus to elect to accept them in installments, thereby
reducing their tax liabilities, and allowing the members to deposit the
money in the new Thrift Savings Plan, which has an annual maximum.

Dislocation
Allowance

Under previous
law, members were not allowed to receive a dislocation
allowance for their first Permanent Change of Station (PCS) assignment.
This has now changed, and all members are authorized a dislocation allowance
for first, and subsequent PCS moves.

Additionally,
families who are forced to move because their base housing is being renovated
or privatized may now receive a partial dislocation allowance of $500.

Finally,
military-married-to-military couples previously could not receive a dislocation
allowance unless they had dependents. This has now changed, and dual-service
couples now receive the full allowance for PCS moves.

Household
Goods Weight Allowance

Beginning
on January 1, 2003, the weight
allowance for shipping household goods increase for junior enlisted:

Category

New
Rate

E-4
and Below (With Dependents)

8,000
lbs

E-4
(Single)

7,000
lbs

E-3
and Below (Single)

5,000
lbs

Temporary
Housing Allowance for Junior Enlisted

Beginning
January 1, 2003, E-4s (with less than two years of service) and E-3s and
below with family members are allowed to receive a temporary housing allowance
during PCS moves. Currently, this entitlement is limited to E-4s and above
with more than two years of service. The rates vary by location.

Increased
PCS Per Diem

Since 1981,
Per Diem paid to military members and dependents making a PCS move by
automobile has been limited to $50.00 per day (one day's travel equals
350 miles). Federal civilians receive $82.00 per day. Under the new law,
effective January 1, 2003, military members must receive the same (or
more) per diem as Federal Civilian Employees.

Family
Separation Allowance

Under the
old law, individuals who elected (voluntarily) not to be accompanied by
dependents during an assignment, were not entitled to family separation
allowance. The new law allows family separation allowance when the member
decides not to relocate a family member because of certifiable medical
problems.

Pet
Quarantine Reimbursement

Rates are
doubled, from $225 to $550.

Private
Vehicle Transportation/Storage

Previously,
the military would only ship vehicles to/from overseas locations for PCS
moves. The new law allows the military to ship privately owned vehicles
to CONUS bases during PCS moves, as long as the cost of the shipment would
not exceed the mileage allowance that would have been paid to the member
to drive the vehicle.

Additionally,
individuals who elect to store their vehicles at commercial storage facilities,
rather than ship them overseas, can now be reimbursed storage costs in
advance.

Travel
During Consecutive Overseas Tours (COT)

Under the
old law, members were allowed a free trip back to their home-of-record
in the states when accepting a Consecutive Overseas Tour. The new law
allows members to take that trip to locations other than their home-of-record,
anywhere in the World, as long as the cost does not exceed what it would
have cost to travel to their home-of-record location.

Frequent
Flyer Benefits

Under the
old law, members and dependents who received promotional benefits during
official government travel had to turn those benefits over to the government.
Under the new provisions, members and dependents can keep promotional
considerations, such as frequent flyer miles, upgrades, etc. The new law
includes provisions so that members can use such benefits earned in the
past, not just benefits earned after implementation of the new law.

VA
Home Loans for Reservists.

The current
authority for Reservists to use the VA Home Loan program runs out September
30, 2007. The new law extends the authority for two years, to September
30, 2009.

Sale
of Leave by Reservists

Reservists
who are called to active duty for more than 30 days, but less than one
year by sell their unused leave if they have accumulated more than 60
days. Previously, only reservists called for contingency operations could
do this.

Commissary
Benefits

Reservists
no longer have to complete a year of service before being authorized to
use the commissary. Benefits now begin immediately, but remain limited
to no more than 24 days per year.